Spending reviews as tools in the public sector

Abstract

Worsening performance of public finance reported by a number of countries as a result of the global financial crisis enhanced interest in advanced and innovative methods of fiscal consolidation and stabilisation. Spending reviews are amongst the most comprehensive and advanced methods of this type. In the post-2008 age, spending reviews have been carried out by countries that had used the tool in earlier periods (the Netherlands, Denmark, Finland, the UK or Australia) as well as by those who started using them for the first time (Ireland, Canada and France). Spending reviews are used in countries that are well advanced economically and whose public management systems are sufficiently mature.European Union Member States exhibit diverse interest in applying spending reviews which are not mandatory and have not been formalised in international legislation. The EU legislation contains general recommendations for the application of the rational fiscal policy enshrined first in the Treaty provisions, further developed by in the Stability and Growth Pact and detailed in 2011. The paper analyses the up-to-date experiences in using spending reviews in selected countries and draws conclusions from the process.